When a person bank in your own country, let say Singapore for example,
you take a substantial risk. You must know this. Even worse, your funds are not secure from unauthorized withdrawal. We assume a situation where you owe tax bills which you are trying to proof invalid, for any reasons.
BUT! Now, in most of the modern Western democracies, it's a simple matter for the government to seize the funds from your domestic bank account that is tied to your name.
One day you have $10,000 in there - and the next day you don't.
(THE GOVERNMENT CAN EASILY GO INTO POSB, OCBC, CITIBANK,UOB or wadever to pull the money out)
Secondly, most Western nations now get the banks to do their tax collecting for
them. This is done by automatically deducting a withholding of tax
on any interest earned. As such, our domestic banks are tax agents and put the
government's interests above you- the client, who pays them!
Opening an offshore bank account puts your funds out of harm's way. If you had
$10,000 in an offshore account, your own government could not touch it at all
automatically. And if you are banking in a place where there is no tax charged on
interest, then your funds are growing faster- without any withholding taxes
being applied at source.
Thirdly, an offshore bank account gives you more financial privacy - something
in great demand in this increasingly regulated world. Lastly, there's the flexibilty that comes with having more than one bank account in more than one country.
This strategy allows you to hedge your bets and keep your cash in dispersed locations.
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